GCC real estate expects slump in prices, company mergers amid COVID-19
"One of the major risks facing the real estate market is the inability of buyers to pay the instalments" says MDMS
Real estate developers in the GCC are expecting to see a slump in in unit prices and company mergers, that will help reduce business risks and significantly increase the ease of doing business.
According to Maximiliano Development Management Services (MDMS), developers are deploying a range of measures and policies to mitigate the ongoing challenges, succeed in strengthening their position, and deepen their relationships with their employees, investors, end-users, and other stakeholders.
Commenting on the risks concerning the industry, Eng. Marwa A. Murad, managing director of MDMS, said: “One of the major risks facing the real estate market is the inability of buyers to pay the instalments so strategies must be adopted such as the reduction in unit prices by 25% in the event of cash sales and small developers who may face the risk of bankruptcy might consider merging with another developer to protect its business.”
“The risk facing the real estate market is the inability of customers to pay the instalments, thus causing a delay in the construction work. As a result, developers may require a shorter period for the instalments which eventually leads to an oversupply of units, thereby creating a negative business cycle.”
“The depth and breadth of the coronavirus outbreak’s economic impact on the real estate sector are still uncertain but real estate players will be well served to take immediate action to improve their businesses and also keep an eye on a future that could be meaningfully different,” added Murad.